Idea posts 13.7% rise in net profit

Analysts had expected the company to report a net profit of Rs.265 crore. Photo: Pradeep Gaur/Mint

Updated: Tue, Jan 29 2013. 11 33 PM IST

Mumbai:Idea Cellular Ltd, India’s third-largest private telecom services provider by revenue, posted a 13.7% rise in net profit to Rs.228.57 crore for the quarter ended 31 December from Rs.201 crore a year ago. It fell 4.6% from Rs.240.04 crore in the trailing quarter.

The Aditya Birla Group company’s consolidated revenue grew 0.8% from a year ago to Rs.5,578.58 crore and was up 4.9% sequentially, primarily led by expansion of voice minutes, the company said in a statement on Tuesday. While this was the third straight quarter of earnings growth for the company, analysts had expected net profit to be higher, with Thomson Reuters I/B/E/S having pegged it at Rs.265 crore.

Idea Cellular rose 0.62% to Rs.113.50 on the BSE. The Sensex fell 0.56% to 19,990.90 points on Tuesday.

The company had 2.9 million subscriber additions in the December quarter against 0.6 million in the trailing quarter despite stricter verification norms. Idea Cellular’s Ebitda (earnings before interest, taxes, depreciation and amortization, or operating profit) at Rs.1,473.4 crore rose 3.5% sequentially while the Ebitda margin remained flat at 26.4%.

Idea, in its press statement, said that contrary to expectations, the average realised rate per minute (ARPM) fell this quarter to 41.1 paise from 41.3 paise in the preceding quarter.

“Idea’s volume growth is strong but we had factored a 1.3% increase in ARPM in the third quarter for Idea and Bharti Airtel,” said Yogesh Kirve, analyst, Anand Rathi Securities Ltd. “However, ARPMs for Idea Cellular are flat. Hence, its revenue growth is slightly lower than our expectations and this shortfall in revenue has affected the net profit and Ebitda to some extent. But we expect the tariff revisions undertaken by telecom operators towards the end of 2012 and beginning of 2013 to start meaningfully reflecting in the average realisations from the fourth quarter.”

Anil Ambani-owned Reliance Communications Ltd (RCom), which declared its December quarter results last week, reported a net profit of Rs.106 core, down 43.3% year-on-year and up 3.3% sequentially. But RCom’s revenue per minute (RPM) rose 2.3% sequentially to 44 paise and average revenue per user (ARPU) grew 16.7% to Rs.119. RCom’s stock closed at Rs.81.05 per share, down 3.86%, on Tuesday.

India’s largest telecom service provider, Bharti Airtel Ltd, will announce its December quarter results on 1 February. Bharti Airtel reduced promotional benefits and free minutes offered to subscribers starting January. Bharti Airtel was down 2.43% to Rs.348.90 on the BSE on Tuesday.